The immunity thats not an immunity

Something quite remarkable happened on 30 December 2013.
While most of us were on holidays, the Minister responsible for
employment laws, The Hon Eric Abetz, issued a press release
announcing small businesses which rely on advice from the Fair Work
Ombudsman (FWO) would not be prosecuted if the advice later turned
out to be wrong.

"Wow - that's great news" thought many employers,
particularly those frustrated after having received different
answers to precisely the same question after contacting the FWO's
often-criticised 'Fair Work Infoline'. But this is, unfortunately,
a Clayton's immunity - the immunity you have when you're not really
having an immunity. Let me explain (and please accept my apologies
in advance - this doesn't end well for employers).

Let's say this afternoon you call the Fair Work Infoline
to find out how much you need to pay Steve, your new administrative
assistant. And let's say that, after going through all the
necessary questions about Steve, his role and your business, the
Infoline consultant confirms his wage is $20 per hour. Now let's go
forward in time to 2019. Steve is about to leave your business
after a long and happy period of employment, but while checking on
his final benefits he discovers he was in fact entitled to $22 per
hour way back in 2014.

Worst still, he also discovers that your subsequent
indexation of his wage each year in line with the Fair Work
Commission's rulings mean he has been underpaid for more than 5
years!

So Steve decides to talk with you about it and, naturally
enough, you're not worried because you paid him exactly what you
were told to pay when you called the Infoline. So you're completely
protected right? Wrong.

While it's true the FWO's prosecution guidelines were
recently updated (quite sensibly I might add) to confirm the Agency
won't seek penalties against an employer who has followed the
Agency's own incorrect advice, you'd still need to backpay Steve as
his pay is a statutory entitlement. Based on a 38 hour working week
over 5 years at $2 an hour, that comes to almost
$20,000.

Unfortunately, many employers - and even some employer
groups - have misunderstood the Minister's recent announcement.
They now think that, as long as they call the Infoline and get a
reference number for their call, they are protected from any and
all future claims relating to underpayments, application of the
incorrect Modern Award, or whatever else they sought advice
about.

Those of us who support clearer advice for employers and a
more responsive FWO would certainly welcome true immunity for
employers who rely in good faith on the advice they receive. And
we'd also like to see the protection from prosecution extended to
include reliance on advice provided by other reputable,
private-sector HR specialists, instead of just from the FWO
itself.

So, while things appear to be moving in the right
direction for employers, this Clayton's immunity isn't much to
write home (or a press release) about.